GameStop Loses $269.7 Million in Fiscal 2012

[Cognimancer]

GameStop Loses $269.7 Million in Fiscal 2012

The biggest game retailer in town has posted their earnings report for the past 12 months, and the results are mixed.

GameStop recently posted their Sales and Earnings report for the 2012 fiscal year, so get ready to talk some numbers. The year was somewhat rough on the company, with CEO Paul Raines admitting that it was a "challenging year for console gaming." While GameStop profits are up, the retailer took a hit to total sales and reported a net loss of nearly $270 million. As it stands, the company is trying to hold out through 2013 until the launch of the next generation of consoles, which it believes will reinvigorate sales.

For 2012, GameStop reported total global sales of $8.89 billion (down 7% from last year) and a net loss of $269.7 million (compared to last year's net earnings of $339.9 million). Despite the overall loss in funds, the company is doing well with profits, reporting a gross profit of $974.9 million, $30 million more than fiscal 2011.

Projections for the year of 2013 are optimistic, hinging on a strong year's end. "As we look towards the start of the new console cycle, our industry market model indicates a return to growth with the launch of new game systems," says Raines. "GameStop is strong, healthy, and ready to lead the industry and its customers into the next phase of gaming." The company anticipates a "strong finish" from late-year releases like Grand Theft Auto V, but not much business until then. "GameStop expects the first half of the year to be challenging as customers postpone purchases leading up to the fourth quarter console launch."

Despite the past year's losses, Raines is confident that GameStop has laid the foundations for profitability moving forward. "We expanded our market leadership position, maintained our financial strength and controlled our spending," he states. "Perhaps most importantly, we invested in our mobile and digital businesses to position the company of future success." We'll see if he was right as the year unfolds.

Source: GameStop [http://news.gamestop.com/press-release/business/gamestop-reports-sales-and-earnings-fiscal-2012-and-provides-2013-outlook]

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[Fappy]

This would be as good a time as ever to look into big trade-in promotions. Since there's not much going on between now and Q4 and the new console gen is about to start they might as well try to liquidate some of their current-gen used games.

 

[cidbahamut]

And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

 

[kajinking]

I never even considered how badly Gamestop would want the nextgen consoles to come out. Th last three times I've gone into a local store I haven't bought anything thanks to steam sales. But if the new consoles come out people might need to head back down to their local Gamestops more often to get the system and all the bells and whistles that usually come with it.

 

[itsthesheppy]

The vultures are circling brick and mortar.

 

[thiosk]

There are huge investment opportunities for barnes and noble, gamestop, circuit city, blockbuster, hollywood video, and best buy!

Wait, some of them don't exist anymore.

Whatever. Buy stock in the rest. Genius plan.

 

[Roxas1359]

This would be as good a time as ever to look into big trade-in promotions. Since there's not much going on between now and Q4 and the new console gen is about to start they might as well try to liquidate some of their current-gen used games.

Basically this. I remember in the past that Gamestop was considering selling old games from like the 6th Gen and the 5th gen of consoles. I guarantee that would bring sales up because a lot of older games are super expensive online. An example is The Misadventures of Tron Bonne for the PS1. The cheapest copy of that game I've ever seen was $110, and that was for a used copy. If Gamesstop were to start selling the older stuff again then that should help them out I think.

 

[dalek sec]

This would be as good a time as ever to look into big trade-in promotions. Since there's not much going on between now and Q4 and the new console gen is about to start they might as well try to liquidate some of their current-gen used games.

Basically this. I remember in the past that Gamestop was considering selling old games from like the 6th Gen and the 5th gen of consoles. I guarantee that would bring sales up because a lot of older games are super expensive online. An example is The Misadventures of Tron Bonne for the PS1. The cheapest copy of that game I've ever seen was $110, and that was for a used copy. If Gamesstop were to start selling the older stuff again then that should help them out I think.

Yeah, there's plenty of GBA games I wish I could get my hands on and would gladly pay for some PS1 games I missed out on the first time around. Honestly, I'm old fashioned I guess when it comes to buying my games. I trust having the game in my hands and not just a program on my computer. That and I just like going out and talking to some other people if only for a little bit and thankfully, the people at the Gamestop don't bloody hassle me to death about pre-ordering something, just once while ringing me up and that's it.

 

[Mrkillhappy]

i think it might be karma at work.

or just the plain old logic that, if you try and scam your customers, they wont be comming back and invest in anything you offer.

Not only that but where I live their are three within less then a two miles of each other. Seriously if they placed their stores further out they will make more money because why do they feel gamers want three gamestops on the same street.

 

[Pyrian]

For 2012, GameStop reported total global sales of $8.89 billion (down 7% from last year) and a net loss of $269.7 million (compared to last year's net earnings of $339.9 million). Despite the overall loss in funds, the company is doing well with profits, reporting a gross profit of $974.9 million, $30 million more than fiscal 2011.

Okay, gross profit $974.9 million, net "profit" -$269.7. That means over $1.2 billion disappeared somewhere between "gross profit" and "net profit". I'm guessing (just guessing, mind you) that somebody claimed some massive writeoffs to avoid paying corporate taxes on what amounts to a healthy profit.

 

[Epona]

And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

Corporate math.

It's like if you predict you will make 1 Million this year and you only make $20,000, that's a loss of $980,000. It's retarded.

 

[rapidoud]

Whoever wrote this article doesn't understand a single thing about financial reports.

"Excluding restructuring, impairment and debt retirement expenses, GameStop?s adjusted net earnings for fiscal year 2012 were $403.0 million compared to adjusted net earnings of $405.1 million in fiscal 2011."

'Including restructuring, impairment and debt retirement expenses of $680.7 million ($672.7 million, net of tax benefit) primarily related to goodwill impairment in the third quarter of 2012, GameStop?s fiscal 2012 net loss was $269.7 million compared to net earnings of $339.9 million in fiscal 2011.'

Their reports aren't out yet, these are preliminaries, but I'm curious to know what exactly they restructured so heavily and what they considered impaired.

Let alone their watered down report states
(Measured in millions if you don't know how to read financial statements)
"Consolidated net income 261.1 174.3 "

CONSOLIDATED NET INCOME, AKA INCLUDING THEIR SUBSIDIARIES IS UP FROM 2012 TO 2013. Don't just look at the parent, look at the group Brett.

A parent's report on their own doesn't include intra-group transactions, of which there are presumably many due to a restructuring occurring.

It's halfway down the page when you start coming to their initial financial statements (this being the statement of comprehensive income)

Jeez.

 

[major_chaos]

I still fail to see what it is that makes people hate GS so much, I wouldn't have half the console games I have now if it wasn't for them. The day brick and mortar stores go away is the day I give up on consoles completely and severely back off on PC purchases.

 

[NiPah]

snip

Thanks for this post, the article came out a bit too sensationalist and way too dumbed down.

 

[Cecilthedarkknight_234]

Start selling retro consoles/games game-stop. To everyone else I don't have any local gaming shops aside from game-stop so if they go under it's back to wal-mart. I would rather eat my own gun then game-shop at Walmart.

 

[dakkster]

I helped out a friend who is the store manager at my local GameStop. He needed someone to come in over the summer and I came in and promptly got some of the best sales numbers in the region without using any dirty sales tactics that our regional manager went on and on about. Then one day a guy and his wife came in and I explained all the ins and outs of 360, PS3 and Wii to them. I went over all the pros and cons for each console for 45 goddamn minutes. In the end they decided to go with a 360 4 gig package.

A week later the customer called and wasn't able to start Forza 3. I tried to guide him through it over the phone and it became apparent that he wasn't the sharpest tool in the shed. But I got him going. That was Saturday. On Sunday I didn't work, but got a call from my colleague who took that shift. She told me some guy had called and was really pissed off about not having any hard drive space.

On Monday I came in for a short shift to close the store and the store manager told me that this idiot had been calling all day making demands about being reimbursed for gas, getting a brand new console with a hard drive for no extra cost and free games. Pure idiocy. Manager guy had tried to call him but no answer and then had to leave and told me that they had come to an agreement to buy a 360 hard drive at a reduced price. So I was alone in the store and the guy calls again, really annoyed. I told him that my manager had tried to call him and he went "my phone has been silent all day" and I said "well, my manager said that he called you" and he went "are you calling me a liar?". Completely irrational. I checked the number and found that my store manager had dialed a 7 instead of a 9. So I asked about their agreement and he said that he wanted a new xbox, that I lied to him and so on. I told him that I was only authorized to do what my manager had given me the green light on and then other customers came in so I had to say goodbye to him.

Five minutes before closing he came in with the entire package, dumped it on the counter and just said "I want to return this and I'm not leaving until it's done". I called my store manager, he wasn't available, so I called the regional manager and tried to explain the whole thing while that pissed off customer was whining and moaning right there in front of me. I gave him the phone and closed the front of the store so no more customers would walk in. He talked to the regional manager for a long time, saying that I had lied to him, that he had been cheated and so on. I got on the phone again and said that wasn't true. The customer isn't always right, especially not when he's a lying, stupid asshole, and I refuse to take shit that situation. 45 minutes after I should have closed the store he finally got his 320 gig xbox for the same price as the 4 gig and we had to do some inventory juggling in the computer, but the issue was resolved.

Then summer ended and I got back to my regular job, told my store manager friend that if he needed help he should just give me a call. I regularly came in to chat with the other people working in the store and then in November my friend told me that he had to get something off his chest. Apparently the regional manager had told him to not let me work in the store anymore because of that incident. I told him that it was ridiculous, because I had the best numbers in the store and among the best in the region while chatting with a lot of the customers, giving out as much good advice as I could. He agreed but had to follow orders from up high. Apparently that's the modus operandi for GameStop. If an idiot customer screams loudly enough, GS caves. Anyway, I haven't been back to the store since then and I've told my other friends what a bullshit operation it is. They're not getting my money again.

 

[OManoghue]

People hate these guys for a reason, I worked for this company. They are so bad, the labor board of my province won me a hefty sum of money for the way they treat employees.